Virgin Orbit Holdings, a satellite launch company spun off from Richard Branson’s space tourism firm Virgin Galactic, has filed for Chapter 11 bankruptcy after failing to secure long-term funding to recover from a rocket failure in January.
The company, which air-launches rockets from beneath a modified Boeing 747 plane to send satellites into orbit, has been hit by a shift in demand towards larger launch rockets and more cost-effective shared rides to space on SpaceX’s Falcon 9 rocket in recent years.
Virgin Orbit’s approach has been to use a 747 airplane modified to launch small rockets during flight, enabling the company to conduct short-notice launches from various locations. However, the competitive stakes have risen, and this has hit the company’s revenue stream.
The rocket failure in January, which was Virgin Orbit’s sixth mission and the first rocket launch out of Britain, dealt a huge blow to the company.
The rocket’s launch attempt was unsuccessful in reaching orbit, resulting in the US and UK intelligence satellites it was carrying to fall into the ocean. The company has since halted operations and furloughed almost all of its employees on March 15 to conserve cash.
Virgin Orbit’s bankruptcy filing, which seeks a sale of its assets, was lodged in the US Bankruptcy Court for the District of Delaware.
Virgin Orbit seeks buyer
According to the bankruptcy filing, Virgin Orbit had assets worth approximately $243 million and total debt of $153.5 million as of September 30. In a statement, Virgin Orbit CEO Dan Hart expressed that the Chapter 11 process would allow the company to find and complete a sale that is effective and maximizes value.
While Virgin Orbit’s innovative air-launch system promised to revolutionize the satellite launch industry, the company’s struggles reflect the highly competitive and capital-intensive nature of the space sector.
Virgin Orbit Holdings, the satellite launch company owned by Richard Branson’s Virgin Group, filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on Tuesday, seeking a sale of its assets after failing to secure long-term funding following its January rocket failure.
According to the filing, the company’s total assets were approximately $243 million while its overall debt was recorded at $153.5 million as of September 30th.
Virgin Orbit’s strategy of launching small rockets from a 747 in flight has been overshadowed by the increasing demand for larger launch rockets and cost-effective shared rides to space.
Despite Virgin Group investing over $1 billion in the unit, including $60 million in secured loans since November, the company’s market value has dropped from over $3 billion two years ago to just $65 million as of Monday’s closing price.
As part of debtor-in-possession financing, Virgin Investments will provide $31.6 million in new money to Virgin Orbit to fund operations while it looks for a buyer in bankruptcy.
The company’s largest creditor is Arqit Ltd, owed almost $10 million for services and as a customer deposit, followed by the United States Space Force, which had a deposit of almost $6.8 million for future launches.
